https://www.allbankingsolutions.com/SBI-Accounting-Jugglery-or-.htm
https://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/psu-banks-to-take-4000-cr-hit-on-pensions/articleshow/8033625.cms
It has been reported several time in the past , written to Prime Minister, President of India and to all important dignitaries on many occasions that for last one decade and more CEO, CMD and top ranked officers of Public sector banks in collusion with , union leaders, association stalwarts ,officials of RBI , Banking Division and Ministry of Finance have not been making adequate provision or making less provisions towards pension or gratuity payment to employees who retire from banks only to show artificial profit and to conceal the misdeeds of top bankers and politicians and to save the image of policy of banking reformation launched and promoted by Doctor economist Mr. Manmohan Singh in 1991 and then supported by UPA government .
Thousands of crores of rupees are sacrificed every year by each bank in waiver of loan or in compromise settlement with defaulting borrowers. Two years ago 75000 crores worth loans were written off by banks to obey the orders of the government who talk of reformation in banking.Crores of rupees are spent by banks in extending red carpet welcome to top ranked government officials, CMD, RBI executive, RBI governor and other VVIP dignitaries but management of bank do not have will to make adequate provision for employees whose contribution in making of bank is of paramount importance and who are more significant and relevant .
Bank management can spend lavishly in motivating team of Chartered Accountants to put their signature of balance sheet without making mention of bad assets. Bank can spend crores of rupees in advertisement, in organization of functions to celebrate or to bid farewell to top officials of the bank but banks do not have adequate income to pay even pension for serving employees. So many suits have been filed in various courts by aggrieved employees or by their association against injustice in Bipartite settlement against the process of promotion but there is none to take care of it. Bank management can pay crores of rupees to advocates to save the legitimate expenses towards staff welfare. This is the pitiable position of PSU banks and this is the position of corrupt mind of top officials of banks and other regulating departments.
Now RBI has given instruction to banks to provide for pension payment at least for retire employees. This amount of provision is estimated to be Rs.4000 crore by RBI. If provision towards pension payment towards serving employees is done which is supposed to be done I assume the amount will come to at least one lac crore and all banks will come in loss and face capital erosion. As such CMD of banks in general through IBA are demanding amortization of provision towards pension payment for coming five years so that burden of provision may be staggered in coming five years.
It is shocking for all those who do not know the level of corruption prevailing in the banking industry. Foul game being played by top bankers is not less dangerous than the game played by Mr. Raju of Satyam Computers.
It s shocking for those media men and economists who considered public sector banks as the best performer and those who are swayed away by sweet promises and tall claim of achievement made by CMD of various banks master mind of fraudulent activities .
It is shocking for government officials who considered Public sector banks as safe and healthy.
But it is not astonishing for bank employees who voiced their protest on fraudulent attitude of CEO, who filed writs in various High courts against injustice in 9th Bipartite settlement signed on 27th of April 2010 in between IBA and union leaders of bank employees,.
Long ago it was reported by many bankers that Union leaders and top ranked officers are not making provision towards pension payment and team of Chartered Accountants are selling their signatures and certifying false and inflated profit and concocted balance sheet.
It is worthwhile to mention here that all companies in the country have to give equal contribution towards Provident Fund as much as they deduct from their employees. Banks also used to contribute equal amount in provident fund for their employees as long as employees in general were member of provident fund. When bank employees opted for pension, banks were supposed to contribute similar amount towards pension fund so that future liability arising out of pension payment could be met without any adverse impact on profitability of banks. But unfortunately many banks stopped making provision towards pension to show inflated and false profit and to remain in good book of RBI officials, Ministry of Finance and also to falsely glorify the policy of liberalization and globalization promoted by Mr. Manmohan Singh.
It is never too late. I expect even now the government will ensure accurate provision towards pension payment.
When banks are unable to meet even legitimate expenses for their serving employees there is no justification in considering the banks as healthy and promoting bank officials as ED or CMD. Union leaders considering themselves as protector of interest of bank employees are also supporting illegal acts of the management. In such postion Managing Director of banks and Union leaders who perpetuated fraudulent and such mischievous activity in banks and RBI officials who allowed this to happen for years together are equally responsible and accountable for current mess in banks and they should be adequately punished.
It is pertinent to mention here that on this point as many as 16 writs are pending in various High courts in India .IBA is still silent spectator of Chirharan of bank employees. None of even VVIPs are least bothered of justice. Reign of injustice will continue as long as corrupt leaders are sitting on top posts.
However it is to be welcome by all bankers and especially retired employees that RBI has ultimately advised banks to make adequate provisions towards pension payment. God knows when top officials will apply their wisdom in protecting the interest of field functionaries on whom depends the real health and real future of the bank.
In brief I can say that inordinate delay in delivery of courts in India is used as tool by corrupt officials to continue their earning through unfair means and to continue their whimsical decisions.
SBI Balance Sheet as on 31.03.2011 -- Is it Merely An Accounting Jugglery or Fraud With Investors ?
Is There a Fraud of Rs 10400.41 cr in Pension Fund Trust alone- How different it is from the famous Satyam computers Scam?
by
Rajendra Kumar Singhal [ rkumarsinghal @ rediffmail.com ]
06.07.2011
Dr K.C. Chakarbarti,
Dy Governor Reserve Bank of India
Reserve Bank of India
Central Office Building
Shahid Bhagat Singh Marg
Central Office,
Fort , Mumbai 400001
Dear Sir
Re: Accounting Jugglery- Fraud in SBI Balance Sheet as on 31.03.2011 -- Rs 10400.41 cr Fraud in Pension Fund Trust alone- How different it is from the famous Satyam computers Scam?
We refer to you’re your comment appearing in various financial dailies “Accounting Jugglery by Banks Draws RBI Flak”. Your comments have been made due o following reasons:
· State Bank of India has shocked the investors with 99% plunge in the net profit for the fourth quarter of fiscal 2011 as it has boosted various provisions.
· It is reported that during - 4th quarter, SBI made a provision of Rs 3263.9 cr for bad debt as compared to Rs 2186.70 cr in the same period in last year.. The full year provision was Rs 6059 cr against Rs 3327 cr showing rise of 82.10% which resulted in net profit dipped by 98.9%
· 70% Provision Coverage Ratio is being blamed for 99% plunge in the profit.
· It is reported that G. Ramaswami President ICAI has taken note of it and written to SBI for explaining the reason for huge provisioning. He has also said that role of RBI as well as SEBI a market regulator is also under question
· P. Sheshagiri Rao, Charterterd Accountant are not bothered about the comments of ICAI (Institute of Chartered Accountant – the apex organization for establishing accounting standards for compliance in India).
In addition to above we have noted the following fraud in the balance sheet- Note on Account no 8 & 9:
· As per Notes (No8) attached to the balance sheet “ consequent upon wage revision and proposed amendment to pension regulations, the pension liability for the year ended 31.03.2011 as determined by independent actuary amounted to Rs 11707 cr. The existing provision is only Rs 1306.70. The additional pension cost liabilities for previous years amounting to Rs 7927.41 cr has been charged to reserve in accordance with dispensation granted by RBI to banks letter no DBOD/BP/No16165/21.04.018/2010-11. The pension cost for the year amounting to Rs 2473 cr has been charged to the profit and loss account.”
· As per Notes (No9) attached to the balance sheet “ Rs 1965 cr has been charged to profit and loss due to enhancement in the gratuity ceiling, and wage revision
Satyam Computers Type Fraud in pension fund trust in the previous year balance sheet has gone unnoticed
As per note -8- attached to balance sheet which reveals that “The additional pension cost liabilities for previous years amounting to Rs 7927.41 cr has been charged to reserve”. It clearly reveals the following:
· In the previous years the bank actuaries have given false valuation on pension liability as mentioned above.
· How the pension liability can go up from Rs 1306.70 cr to Rs 11707 cr (Rs 1306.70 cr +7927.41 +2473) in one year alone.
· It clearly proves that the profit and loss and balance sheet of the bank was falsified. It was not fair and transparent balance sheet of the bank during past several years.
· The liability on account of pension fund was not deposited in pension fund and it was distributed as divided to investor.
Governor RBI & Dr K.C.Charkarwarti Dy.RBI Governor may kindly note :-
· CBI has already prosecuted Hiranandani builders of Mumbai and Mr Raju of Satyam computers under 120 B (punishment for conspiracy) read with 409 (breach of trust) 420 cheating 467/468 forgery 471 use of forgery 477A falsification of accounts .
· Statutory Auditors are liable under company act/ IPC /CA act for gross negligence of professional duty, failure to report material misstatement. Price Water Coopers (PWC) an international Chartered Account Firm) have also been prosecuted by CBI in Satyam Scandal.
· SEBI can prosecute under SEBI ACT.
· SFIO can investigate under 235 to 247 of companies Act 1956. Please note that Satyam CMD/ Auditor/are s being prosecuted under above acts.
· CBI it self has prosecuted Chairman Hiranandani builders in Mumbai for not depositing PF of employees ( not depositing retirement funds is an unpardonable offence) .
Questions to RBI Governor/ Dy. Governor:
· The RBI is carrying out Annual Financial Inspection (AFIR) of Banks every year. Is the AFIR of RBI is an eye wash?
· RBI has directed each bank in 2006 to formulate a compliance policy to ensure that regulatory/ statutory compliances are complied with by the Banks. Whether during the course of AFIR, RBI monitor that regulatory/ statutory compliances have been followed by the bank?. (Please note that the depositing retirement dues are is statutory compliance).?
· Whether RBI treat such misreporting in the balance sheet as fraud if not than why it is not. Do you follow different yardsticks for different Company. Satyam chairman in Jail and SBI chairman is a free bird??
· Will you report the matter to SFIO for suitable action?
· Whether RBI has sent any special investigation team to RBI to unearth the biggest scam in the pension fund trust of employees?.
· Whether RBI has taken any action or advised to ICAI to initiate action against -14- SCAs of SBI who have certified the falsified balance sheet of past years?.
· How incompetent CAs are finding there name in the panel approved by RBI?.
· Whether RBI has reported to other regulator like SEBI, a watchdog to safeguard the investors interest. How the investors have been taken for ride by misleading balance sheet in previous years?
· Whether RBI has taken the matter with Institute of Actuaries to take action against actuaries who are giving reports which suits to then management? Have you asked the institute to carry our independent investigation of pension liability and punish the wrong doer forgiving false actuarial valuation in the previous years.?.
Whether RBI Governor/ Dy Governor feels that by merely issuing press statement will absolve them from their liability?
The above communication may please be taken note for compliance because this is going to be part of judicial proceeding of various HC/ Supreme Court where pension issues are pending and action of Regulator will be under scrutiny.
Rajendra Kumar.Singhal
CONVENOR
FORUM FOR JUSTICE TO BANK EMPLOYEES AND OFFICERS.
rkumarsinghal @ rediffmail.com
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